At the end of 2024, the Bit market experienced a period of volatility. Over the past few months, the price of Ethereum (ETH) has been unstable, fluctuating between $3,100 and $4,000 in December. Although it is still some distance from the historical high (around $4,878), the market's call for it to break through the historical high again in 2025 is gradually increasing.
Can Ethereum become the leader of the rebound in Q1 2025?
Looking back on the history and current status of Ethereum, we can find several positive indicators showing that Ethereum is likely to perform strongly in the future:
Increase in long-term Bit holders
The data monitoring platform IntoTheBlock shows that the proportion of long-term Bit holders (holding for more than 1 year) of Ethereum increased significantly to 75% in 2024, indicating that market confidence in the future of Ethereum is accumulating. In contrast, the number of long-term holders of Bit has decreased slightly this year, indicating that investors and institutions have a positive outlook on the future of Ethereum.
This chart shows the percentage of long-term Bitcoin and Ether holders over the past year.
While the share of long-term Bitcoin decreased, the percentage of long-term ETH holders climbed, surpassing that of Bitcoin early in the year. pic.twitter.com/F7ghaSq66T
— IntoTheBlock (@intotheblock) December 29, 2024
Significant inflow of ETF funds
Since the United States approved the first Ethereum spot ETFs, large funds have flowed into the market, especially recently attracting about $1.66 billion in funds in December, and the total assets managed by all Ethereum ETF products are currently about $11 billion. This reflects the strong interest of institutional investors in Ethereum, providing potential support for its price.
Further reading:Ethereum price soared 19% in a single day! Spot ETF finally approved, what's next?
Trump effect and market sentiment
A recent development that has attracted market attention is the DeFi fund project World Liberty Financial launched by the Trump family, which has purchased tens of millions of dollars (about 16,478 Bits) of Ethereum (which can be seen on the de-anonymized data platform Arkham). This not only enhances the market's attention to Ethereum, but also further consolidates Ethereum's position as a key asset in the DeFi field.
Further reading:What is Arkham and how to use it? How can it instantly discover that Tesla transferred $770 million in Bit?
At the same time, the staking yield of Ethereum is gradually becoming a focus of discussion for investors, especially as the popularization of ETFs, the staking yield may shift to new investment tools such as ETFs, providing the market with new liquidity options. These factors have continued to increase the attractiveness of Ethereum to investors, further boosting its price potential.
Challenges Ethereum faces in breaking the historical high
Despite the optimistic outlook, the market still needs to face some real challenges, the most important of which is the strict regulation of the U.S. Securities and Exchange Commission (SEC).
The SEC has recently strengthened its scrutiny of many Bit companies and delayed the approval of some new ETF applications, which may slow the pace of capital entering the market. The Bit market needs time to digest these policy risks, and "mainstream currencies" like Ethereum are more likely to become the focus of regulation. Analysts believe that if the SEC maintains a hawkish stance, it may suppress market enthusiasm in the short term, making it difficult for prices to break through quickly.
If the regulatory authorities adopt a "hawkish" stance, it means that the regulation of the Bit market may be more stringent. Hawkish policies usually focus on suppressing inflation and supporting higher interest rates to reduce market liquidity. For example, Bit exchanges may face higher compliance requirements or tax regulations, leading to a decline in market liquidity and further affecting investor confidence.
Conclusion
Ethereum's strong fundamentals and market confidence make it likely to become the leader of the rebound in the first quarter of 2025, but whether it can break through the historical high still depends on the interaction of multiple factors, including the inflow of ETF funds, the support of long-term holders, and the direction of regulatory policies. In this market game, opportunities and challenges coexist. For investors, they need to not only see the potential of Ethereum, but also be prepared for short-term volatility.
( * The content of this article does not constitute any form of investment advice. Any investment has risks, please research and consider carefully before deciding! )
* The content of this article was edited with the assistance of AI
〈Will Ethereum Break the Historical High Next Year? Exploring the Market Trends and Potential Challenges of Ethereum〉This article was first published on《NONE LAND》.
